Lawyer sues US homeland dept to probe supposed Satoshi Nakamoto meeting
Update: April 8 at 1:01am UTC: This article has been updated to include James Murphy’s responses to two questions from Cointelegraph.
A crypto lawyer has sued the US Department of Homeland Security, alleging the agency may know who created Bitcoin — compelling the department to share what it knows.
The Freedom of Information Act lawsuit was filed by James Murphy, who based his accusations on claims made by DHS Special Agent Rana Saoud at a conference in April 2019, where she said a few of her colleagues had previously met with four people involved in creating Bitcoin.
“My FOIA lawsuit simply asks for the notes, email and other documents relating to that alleged interview,” Murphy posted to X after announcing the April 7 suit.
“IF the interview really happened as the DHS Agent claimed, there should be documentation of the substance of that meeting,” added Murphy, who goes by MetaLawMan on X.
Source: James Murphy
Speaking at the OffshoreAlert Conference North America in Miami in April 2019, Saoud said DHS agents met with the four people it believed to have created Bitcoin, asking what their motives were and what the “end game” is for Bitcoin.
“The agents flew to California and they realized that he wasn’t alone in creating this, there were three other people, they sat down and talked with them to find out how this actually works and what the reason for it was,” Saoud said in the presentation, which is available on YouTube.
If the DHS resists disclosure, Murphy said he will “pursue the case to conclusion” to solve the mystery.
Murphy, however, noted that it is possible that Saoud and the other DHS agents were mistaken and did not interview the real Satoshi Nakamoto.
Related: Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset
Murphy is being assisted by former Assistant US Attorney Brian Field, who specializes in Freedom of Information Act litigation.
The purpose of the Freedom of Information Act is to promote transparency and accountability by granting the public access to information held by the government.
2 questions for James Murphy, aka MetaLawMan
Cointelegraph asked Murphy two questions about the DHS lawsuit. Here are his responses in full.
Question #1: What is your gut feeling—do you think the DHS actually interviewed the real Satoshi?
Answer: “I think it’s very possible that the DHS agent was mistaken in what she said at that conference. I think DHS agents may have met with bitcoin code maintainers, or with actual Satoshi imposters. But, who knows? The DHS agent was a pretty high ranking official and was in a position to know what she was talking about. Either way, I think it will be productive to find out and hopefully resolve this question. Nothing prevents DHS from voluntarily revealing the information without need for protracted litigation.”
Question #2: If the agency did speak with the four creators — who may be ordinary US citizens — why do you believe revealing their identities serves the public interest, even if it could put their safety or privacy at risk?
Answer: “I don’t understand the question. The identities of the creators of all of the largest blockchain projects, like Charles Hoskinson and Vitalik Buterin etc., are all well known in the crypto community. There are also many major figures like Michael Saylor, Tim Draper and others who have amassed enormous wealth through investment in bitcoin and their identities are well known.
There are hundreds of documentaries on YouTube where amateur sleuths have tried to identify Satoshi. I’m not one of them. I’m not hiring investigators to try to track down Satoshi, I’m seeking government records under transparency laws in effect in the U.S. If DHS did, in fact, learn Satoshi’s identity, then I’m not sure what the rationale is for dozens of government employees to have this information but withhold it from the general public.
Our government is required to be transparent and not keep secrets from the citizens, absent a legitimate national security concern or other limited exemption. We consider this a fundamental aspect of our freedom in the USA. It is why we have something called the “Freedom of Information Act.” Transparency is good, the government hiding information from the citizenry is generally bad.
I am open about the fact that I am pro-bitcoin, having been an investor in bitcoin and a bitcoin miner since 2017. I speak to groups of executives and policy makers about bitcoin and I advocate for bitcoin adoption. What I find when I give these talks is very often these audiences (who are new to bitcoin) struggle with the idea that the creator of bitcoin is unknown while the provenance of the other major crypto projects is (relatively) transparent.
So, my intention is to either conclusively refute the claim of the DHS agent that they interviewed Satoshi, or achieve some transparency that will open the door to greater bitcoin adoption in the U.S. and around the globe. I support President Trump’s initiatives to establish a Strategic Bitcoin Reserve and Digital Asset Stockpile.
Since the bitcoin code is open source and can only be changed through the Bitcoin Improvement Proposal (BIP) procedure, Satoshi (if he or they were identified) would have no ability to unilaterally affect changes to bitcoin. As a result, any revelation of Satoshi’s identity is unlikely to adversely impact bitcoin. It’s more likely that such transparency would be a net positive for growing bitcoin adoption. Others may have different views on that and I respect their opinions.”
Efforts to identify Satoshi Nakamoto have failed
The lawsuit follows a wave of recent efforts attempting to uncover Satoshi’s identity.
Last October, a controversial HBO documentary claimed that Peter Todd, a Bitcoin cypherpunk, invented Bitcoin. Todd refuted that conclusion, and most industry pundits said HBO’s evidence was weak.
Nick Szabo, Adam Back and Hal Finney have also had their names tied to Satoshi’s identity. Szabo and Back regularly refute claims they’re Satoshi, as did Finney before he died in 2013.
Meanwhile, members of the Bitcoin community are split on whether unveiling Satoshi’s identity would be a net positive for Bitcoin.
Some worry that revealing Satoshi’s identity could compromise Bitcoin’s decentralized ethos and put Satoshi’s safety at risk, while others want to be reassured that Bitcoin wasn’t created by the US government.
Magazine: 10 crypto theories that missed as badly as ‘Peter Todd is Satoshi’
A US federal judge has agreed to pause a lawsuit filed by 18 state attorneys general and the crypto lobby group DeFi Education Fund against the Securities and Exchange Commission after all parties said new SEC leadership could make the action moot.
Kentucky District Court Judge Gregory Van Tatenhove ordered a 60-day stay on the case on April 16, noting a mid-March filing from the SEC that “this case could potentially be resolved” due to a leadership transition at the regulator.
He added that the parties must file a joint status report within 30 days.
Paul Atkins, a Wall Street adviser who has held board positions with crypto advocacy groups, was sworn in as the new SEC chair earlier this month, replacing acting chair Mark Uyeda and taking over from Gary Gensler.
The 18 attorneys general, all hailing from Republican states, filed the lawsuit with the DeFi Education Fund against the securities regulator in November, alleging that the SEC exceeded its authority when targeting crypto exchanges with lawsuits, accusing the regulator and then-chair Gensler of “gross government overreach.”
The plaintiffs included attorneys general from Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, Indiana, Oklahoma and Florida, among others.
“Without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions,” the lawsuit stated.
DeFi groups drop case against IRS over killed broker rule
Meanwhile, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dropped their lawsuit against the Internal Revenue Service on April 16.
“The parties hereby stipulate to voluntary dismissal of this action without prejudice because the case has become moot,” stated the filing.
The lawsuit, filed in December, argued that the so-called IRS DeFi broker rule went beyond the agency’s authority and was unconstitutional.
Related: NY attorney general urges Congress to keep pensions crypto-free — ‘No intrinsic value’
On April 11, President Donald Trump signed a bill to revoke the rule that would have required DeFi protocols to report transactions to the IRS.
It comes as the SEC has paused or dropped several high-profile lawsuits against crypto companies this year under its new leadership.
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Panama’s capital city will accept cryptocurrency payments for taxes and municipal fees, including bus tickets and permits, Panama City mayor Mayer Mizrachi announced on April 15, joining a growing list of jurisdictions globally that have voted to accept such payments.
Panama City will begin accepting Bitcoin (BTC), Ether (ETH), Circle’s USDC (USDC), and Tether’s USDt (USDT) stablecoin for payment once the crypto-to-fiat payment rails are established, Mizrachi posted on the X platform.
Mizrachi said previous administrations attempted to push through similar legislation but failed to overcome stipulations requiring the local government to accept funds denominated in US dollars.
In a translated statement, the Panama City mayor said that the local government partnered with a bank that will immediately convert any digital assets received into US dollars, allowing the municipality to accept crypto without introducing new legislation.
Panama City joins a growing list of global jurisdictions on the municipal and state level accepting cryptocurrency payments for taxes, exploring Bitcoin strategic reserves to protect public treasuries from inflation and passing pro-crypto policies to attract investment.
Related: New York bill proposes legalizing Bitcoin, crypto for state payments
Municipalities and states embrace digital assets
Several municipalities and territories around the globe already accept crypto for tax payments or are exploring various implementations of blockchain technology for government spending.
The US state of Colorado started accepting crypto payments for taxes in September 2022. Much like Panama City said it will do, Colorado immediately converts the crypto to fiat.
In December 2023, the city of Lugano, Switzerland, announced taxes and city fees could be paid in Bitcoin, which was one of the developments that earned it the reputation of being a globally recognized Bitcoin city.
The city council of Vancouver, Canada, passed a motion to become “Bitcoin-friendly city” in December 2024. As part of that motion, the Vancouver local government will explore integrating BTC into the financial system, including tax payments.
North Carolina lawmaker Neal Jackson introduced legislation titled “The North Carolina Digital Asset Freedom Act” on April 10. If passed, the bill will recognize cryptocurrencies as an official form of payment that can be used to pay taxes.
Magazine: Crypto City: The ultimate guide to Miami
As digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea,” said US Federal Reserve Chair Jerome Powell.
In an April 16 panel at the Economic Club of Chicago, Powell commented on the evolution of the cryptocurrency industry, which has delivered a consumer use case that “could have wide appeal” following a difficult “wave of failures and frauds,” he said.
Powell delivers remarks at the Economic Club of Chicago. Source: Bloomberg Television
During crypto’s difficult years, which culminated in 2022 and 2023 with several high-profile business failures, the Fed “worked with Congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start,” said Powell. “We were not successful.”
“I think that the climate is changing and you’re moving into more mainstreaming of that whole sector, so Congress is again looking […] at a legal framework for stablecoins,” he said.
“Depending on what’s in it, that’s a good idea. We need that. There isn’t one now,” said Powell.
This isn’t the first time Powell acknowledged the need for stablecoin legislation. In June 2023, the Fed boss told the House Financial Services Committee that stablecoins were “a form of money” that requires “robust” federal oversight.
Related: Stablecoins are the best way to ensure US dollar dominance — Web3 CEO
Support for stablecoin legislation is growing
The election of US President Donald Trump has ushered in a new era of pro-crypto appointments and policy shifts that could make America a digital asset superpower.
Washington’s formal embrace of cryptocurrency began earlier this year when Trump established the President’s Council of Advisers on Digital Assets, with Bo Hines as the executive director.
Hines told a digital asset summit in New York last month that a comprehensive stablecoin bill was a top priority for the current administration. After the Senate Banking Committee passed the GENIUS Act, a final stablecoin bill could arrive at the president’s desk “in the next two months,” said Hines.
Bo Hines (right) speaks of “imminent” stablecoin legislation at the Digital Asset Summit on March 18. Source: Cointelegraph
Stablecoins pegged to the US dollar are by far the most popular tokens used for remittances and cryptocurrency trading.
The combined value of all stablecoins is currently $227 billion, according to RWA.xyz. The dollar-pegged USDC (USDC) and USDt (USDT) account for more than 88% of the total market.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
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